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Powering Europe - European Wind Energy Association

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DeVelOpmeNtSINtheeUrOpeaN<br />

electrIcItymarket<br />

3.1 Liberalised national<br />

markets<br />

The reason for liberalising the <strong>Europe</strong>an electricity<br />

market is to create a competitive and truly integrated<br />

electricity market in the <strong>Europe</strong>an Union. The first<br />

years of liberalisation were characterised by the opening<br />

of national markets for competition. As ownership<br />

unbundling of generation, transmission and distribution<br />

progresses, utility companies in their traditional<br />

form will cease to exist. The public obligation of the<br />

vertically integrated utility - to keep the lights on by<br />

controlling generation, transport and distribution - is<br />

no longer valid, and gives way to self-dispatch mechanisms.<br />

This means that while the transmission network<br />

is controlled by the TSO, the power plants are<br />

dispatched by the market participants.<br />

chApTEr 5 electrIcItymarketDeSIgN<br />

In order to guarantee network security, self-dispatch<br />

will be accompanied by balancing obligations. Each<br />

user of the transmission grid will be responsible for<br />

keeping his activities neutral with respect to the grid,<br />

that is, maintaining the equilibrium of injections to and<br />

withdrawals from the transmission system for its portfolio.<br />

As a consequence, in a liberalised market, grid<br />

users present the TSO with a balanced programme on<br />

a day-ahead basis, with a time resolution of between<br />

15 minutes and one hour. Imbalances (violations of<br />

the generation-load equilibrium of a particular portfolio)<br />

are settled ex-post with the TSO at an imbalance<br />

tariff that is unfavourable compared to market prices.<br />

The TSO keeps the responsibility for the balance of its<br />

control zone, contributing thus to overall system security.<br />

The means to do so, namely the reserve power<br />

plants, are contracted from market participants able<br />

to provide fast regulating power.<br />

123<br />

Photo: Thinkstock

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